Australian sharemarkets and the dollar surged to new highs today following strong results from the US and on commodities markets overnight.
By 12.36pm, the Australian dollar has hit a new 23-year-high of US92.5c, well up on last Friday’s Sydney close of US91.17c, while the S&P/ASX 200 is up 1% on Friday’s close to 6770.1.
But while equity and currency markets boom, things are a bit more staid and sensible in the real economy, with both the NAB Business Confidence Survey and Visa-VECCI Business Trends and Prospects survey both reporting a slide in business confidence.
The NAB survey reported a two-point decline in business confidence for the December 2007 quarter, although the measure remains nine points above the line separating negative from positive sentiment.
SMEs with turnover of $3 million to $5 million were the most confident, while very small SMEs and larger businesses were more pessimistic.
By sector, non-residential construction and parts of manufacturing related to the resources/energy boom were the most optimistic, while non-food retailing, residential construction, parts of transport, wholesaling and manufacturing are less confident.
According to the Visa-VECCI survey of Victorian businesses, done in mid September, 26% of business owners anticipate that Australia’s economic performance will be stronger during the next 12 months, down from 32% in the June quarter 2007 survey.
Just over 20% of those businesses surveyed believe the state economy will experience stronger growth during the next 12 months, down from 28% in the June quarter survey.